Good morning, everyone. I'm Robbie Marcus , the MedTech analyst at JPMorgan. Really happy to have Edwards for our next session here. CEO Bernard Zovighian will do a presentation, followed by a little Q&A after. Bernard?
Thank you, Robbie, for hosting. Good morning, everyone. Great to be here. I clearly value your interest in Edwards. I'm super excited to share our vision for this year, 2025, and for the long term. We are going to make some forward-looking statements, which involve risk. They are listed on our website and filed with the SEC. We also use non-GAAP financial measures. The reconciliations are available on our website. So, as you heard at our recent investor conference in December, we have a very unique innovation strategy with three key elements. The first one is we are focusing on large and complex patient and unmet needs. Second, we like to go first, to bring breakthrough technologies, to create new categories, and to define these new categories.
And this results in us being a clear leader, global leader in structural heart disease today, and position us to deliver sustainable long-term growth. I like to start always with our foundation. This is what makes us very unique as a company. It begins with our credo. This is what guides us: our patient-focused culture, making sure that we make the right decision, having the patient in mind always. And we have a very unique innovation strategy, and I'm going to go deeper in a few minutes. All of these together, our credo, patient-focused culture, our unique innovation strategy, it is truly what makes us a very special company. So let me tell you a little bit about the company we are today. I'm super proud about it. 16,000 employees dedicated to helping patients. We have global reach. We are present in more than 100 countries.
We have a very healthy P&L and balance sheet that we can fund our strategy. And at the same time, we are very nimble and very agile as a company. We have a very strong supply chain. So I remember that during COVID, our supply chain, where many companies were struggling, our supply chain was resilient and still resilient. We are investing a lot in our supply chain. We deliver consistent, strong financial performance over the last 24 years. So together, the 16,000 employees, we are elevating the standard of care for millions of patients. So let's talk about our innovation strategy. And we do it in a very unique manner. It starts with our long-term commitment. We start with these large unmet patient needs. We have multiple concepts. We land Gen 1. We launch Gen 1, and then we continue this iterative process.
We bring Gen 2, Gen 3, Gen 4. And this requires commitment, big investments, and obviously deep expertise from many engineers in the company. We are not afraid to take risks and be agile. And it is why we have this strong pipeline and R&D investment. We lead with high-quality science. That's super important to us. You know that there are different kinds of studies, correct? The range of clinical studies goes from marketing studies, where a company decides to do a study to prove something without any supervision, to all the way FDA-approved randomized studies. And we care about this high quality of science, FDA-approved randomized studies. This is how we differentiate ourselves. We have deep stakeholder relationships with all of our stakeholders in the healthcare ecosystem.
All of that basically enables us to be the pioneer we are, the leader we are today, where 95% of our technology are in a global leadership position. We made, over the years, many important strategic portfolio decisions, like the funding of TMTT about eight years ago. At the time, nobody was looking at this as a big opportunity. The sale of Critical Care last year, where we said Critical Care is a great business, but not necessarily fitting our core strategy. And then targeted acquisition that we made in the last 10 years, and we made a few last year also. All of this expanded our reach. What you can see here today, we are reaching a broad range of patients: aortic, mitral, tricuspid, AR, and structural heart failure. Each one of these is large, complex, and growing.
In addition to being large, it is very tough on the patient. In many cases, the patients, they don't have any solutions, and they are facing a high mortality and a terrible quality of life. It is also a significant burden to the healthcare system, huge cost. And as a company, you can see here, with our portfolio here, we are uniquely positioned to bring lifesaving solutions to these millions of patients. Our technology is backed with high quality of science. I already talked about it, the kind of science that we care about. You can see here that we are making significant investment across the company to bring more evidence in TAVR, in mitral and tricuspid, in surgical. I am also super excited about the new trial in the emerging opportunity for us, AR and heart failure.
At TCT this year, you will see the result of the ENCIRCLE study studying a SAPIEN M3, and all of that together, in addition to bringing science, it will help us unlock big opportunities in front of us. Let me go into the business side of things, starting with TAVR. TAVR has a very bright future. First, we have the leading platform, the leading TAVR platform, SAPIEN. This is the best technology, the best evidence. There is a reason why we are the global leader. The current opportunity, severe symptomatic, has still plenty of opportunities. It is largely underdiagnosed, undertreated. In addition, we see additional growth catalysts with EARLY TAVR for asymptomatic patients and PROGRESS for the moderate patients, so what you can expect is many years of growth ahead of us in TAVR, and here are the different milestones for 2025 and beyond that you can expect in TAVR.
So for EARLY TAVR , we are already presented with a trial result, very solid, high quality of science at TCT this year. We expect an indication approval in the U.S. by mid-year 2025, followed by U.S. guideline changes, NCD, and then we will take all of these globally in Europe, in Japan, and elsewhere. So you can expect to see the impact of EARLY TAVR in 2025, 2026, and 2027, and probably beyond. We expect the PROGRESS data to be released at TCT 2026, and then if the trial is successful, obviously we did the trial because we believe that treating a moderate patient will be important, but we need to see if the trial is going to be successful, so if the trial is successful, we will repeat this EARLY TAVR journey, presentation of the data at TCT 2026, indication expansion, guideline changes, NCD, and so on.
So again, PROGRESS will have an impact starting in 2027 and then up to 2028, 2029, and 2030. So it is why we are super excited about the future of TAVR. It is a very large franchise today, $4 billion, and set to grow nicely in the next five to 10 years, starting this year. In TMTT, there are millions of patients around the world suffering from mitral and tricuspid disease. We were the first to believe and to invest in having a very comprehensive portfolio. What you see right now is tricuspid is accelerating with both repair and replacement. Mitral is expanding. And soon this year in Europe, we are expecting to get a CE Mark and in 2026 an approval about our mitral replacement M3.
So being the only company having this kind of portfolio to treat basically the needs of so many patients, we believe that what we have in front of us is a multi-year journey of many catalysts and growth from mitral and tricuspid. We like our surgical business. We have been the leader for 65 years. We know it is not easy to make a surgical valve. We have had uninterrupted leadership over the last 65 years. It is a $1 billion franchise growing with an amazing future ahead of us. We see RESILIA being an important catalyst, offering durability to this patient is super important. Addressing patients beyond aortic stenosis in surgical also is very important and growing in the emerging market. So large business with plenty of opportunity in front of them. Let's talk about the growth ahead of us. Before that, I want to look back at 2024.
As I said in December at our investor conference, two things didn't go the way we wanted. TAVR growth was below our expectation and our stock price. But I am pleased about so many things. First, the new company profile enabled us to deliver our original total company guidance of 8 to 10, despite EARLY TAVR growing in a slower manner because of mitral and tricuspid. This will not have been possible a year ago, two years ago, 10 years ago. The company today is stronger, is more diversified, and has multiple growth drivers. But also the sale of Critical Care . It is a great business. We find a great home with BD and definitely didn't fit our core capability and our strategic focus. But the sale of Critical Car e was an important strategic decision. Subsequent to that, we right-sized the company, in which all of this happened in 2024.
But also the continued investment, long-term investment in our pipeline, internally more than $1 billion in R&D and externally targeted strategic acquisitions, and finally, our Q4 guidance that we gave during the Q3 earnings call is unchanged, so we are exiting the year in a much stronger position, moving from, again, one growth driver, TAVR, to three growth drivers, TAVR, mitral and tricuspid, and two emerging opportunities, heart failure and AR. Now let's look at the catalysts that we have in front of us in 2025 and beyond. Surgical, our historical $1 billion business, is positioned to grow in a consistent fashion. TAVR is and will remain a growth driver for us. Super excited about mitral and tricuspid becoming additional growth drivers for the company. The new emerging opportunities, structural heart failure and AR, here we see a potential to transform care for these patients.
In addition to all of this, in the past, we have been significant investors in structural heart disease, and we are going to continue to do that in a very strategic and targeted fashion. Obviously, we are going to continue investing and looking at opportunity to go first, bringing breakthrough technologies, creating category, and leading this category like we have done in the past 65 years. Let's look at 2025. It will be a year in my mind of strong financial performance led by TAVR, mitral, and tricuspid. We expect the total company revenue growth of 8%-10%. We are maintaining the 5%-7% guidance for TAVR, assuming EARLY TAVR approval mid-2025. TMTT becoming a large business, growing to $500 million-$530 million, growing 50%-60%. There are not many medtech businesses at that size growing at that pace.
We are very pleased and very excited about our TMTT exceptional performance and the potential it has to patient and to company growth. So clearly, you see the impact of our strategy, removing Critical Care sales with structural heart businesses with higher growth potential and better strategic fit. EPS $2.40-$2.50, which is a strong base for double-digit earning growth in 2026 and beyond. So if I make a summary for 2025 from a financial standpoint, set to be a strong year, the first year as a purely structural heart disease company, and also setting the stage for sustainable long-term profitable growth. Beyond 2025, we see a number of important strategic catalysts to accelerate growth beyond the 8%-10% of 2025. As a result, we see that our $4 billion TAVR franchise guidance could be between mid- to high-single-digit in 2026 and beyond.
TMTT having increasing contribution year over year to reach $2 billion by 2030, surgical mid single digit, and structural heart failure and TAVR AR representing basically an increased contribution to the company growth. So in summary for 2026 and beyond, very exciting for the company. We are targeting 10% average annual total company growth. Like in the past, I'm sure we will experience some volatility year over year. So for instance, if one year we have an NCD, we are going to be above 10%. The year after, we might be slightly below. But in average, 2026 and beyond can expect basically the company growing 10, around 10 in average. In addition to this acceleration on the top line, you can expect double-digit EPS growth, which represents a nice leverage bottom line. So in closing, we are very confident in our strategy.
Structural heart is a very large, growing complex with millions of patients in need. We are the one bringing life-saving differentiated technologies with this very comprehensive portfolio, reaching all of these patients, most of these patients. 2025 will be a year of strong financial performance with three growth drivers, TAVR, mitral, and tricuspid. 2026 and beyond, we will be even more exciting with the addition of these two emerging opportunities, TAVR AR and heart failure. So I'm going to leave you today with, we are the only company solely focusing on structural heart disease. We are committed. We have the experience, the expertise, the agility, and the portfolio to change the standard of care for all of these patients. So with that, I'm going to ask Robbie to come back and get into the Q&A session.
Great. Bernard, maybe we could start with TAVR.
You had positive asymptomatic data at TCT last year. You have the moderate risk trial coming next year. Maybe speak to how you view the evolution of TAVR from this point with those two trials, assuming PROGRESS next year is positive. Sort of how does that open up the patient population? And then on top of that, sort of what does Edwards need to do to make sure that there's enough room in the system for everybody to be treated?
Yeah. No, that's a very good question. And I am super proud about what we are doing and what we have been doing. So our TAVR franchise is a $4 billion franchise. And we have been focusing on, again, high quality of science to further unlock the potential, being able to treat more patients. So seven years ago, we said, and we are the only company we said, look, having an asymptomatic trial will be super important to advance the science to better understand this disease. So we took the risk. We had the knowledge. And the trial at TCT was a big success. So now we know that when a patient has a disease, symptomatic or not, the patient needs to be treated. And this is going to represent a major catalyst in the years ahead. We did the same for moderate.
One is very pleased about our vision, our long-term commitment, commitment to science to do that. What we have to do is there is a journey, correct? You commit to do this kind of trial. You need to have a positive trial, again, FDA-approved studies, and then get an approval. For EARLY TAVR , we expect to have this mid-year 2025. Then you need to have guideline changes, potentially new NCD, and bring that globally. There is a lot to do here, but we have all of the evidence to do it. With PROGRESS, provided the result of the trial will be positive, we will have to do the same. Everything starts with high quality of science.
Some of the doctor feedback I heard on the asymptomatic trials that you actually ran it too well, that there was too quick a turnaround from identification of symptoms to treatment. And so it doesn't actually reflect the real-world results of the control arm. What's the feedback you're getting from doctors? And do you think the trial is going to be enough to make sure that doctors treat all patients regardless of symptoms?
I would say we get a ton of positive feedback. As always, we learn a lot when you do a trial, but you learn a lot also when you are commercial, when you have hundreds, thousands of centers implementing the new guidelines. So we are very pleased about where we are, and I'm sure we are going to learn more as the guideline changes, as we get an approval from the FDA in the U.S., as more physicians are going to treat asymptomatic patients, but let's reflect back. The fact that a patient has a disease with or without symptoms doesn't matter, don't you think? We knew that. We had a gut feeling before the trial. It is why we did the trial. It is like, let me take an analogy. Let's say today we are a patient. We go to the hospital to get a CT scan for whatever.
A mass is detected. Cancer is detected. The patient has no symptoms. Do you imagine the physician telling the patient, "Wait to get some symptoms"? And it is exactly what we are doing. So it is why I am sure physicians are going to learn, are going to use the clinical study, are going to learn in their own practice. They are going to change their practice. They are going to do what's best for their patient. I'm trusting the clinical community to use the data, to use their own experience to treat the patient.
You're expecting approval for asymptomatic middle of the year. Do you think that'll be an Edwards-specific approval? Do you think that'll be applicable to TAVR in general?
These trials, together with the moderate trial, are not device to device or treatment to treatment like TAVR to surgical. These two studies are truly about studying the disease. So if a technology, a TAVR technology, has a similar outcome than the SAPIEN platform, I think the outcome should be applicable. I don't believe today there are many TAVR technologies equivalent to ours. And that's an important so for me, it is like the disease result, the learning of the disease is very clear. Let's don't wait for symptoms. But you need to have a great platform, TAVR platform, to apply your results.
One of the things we've heard over the past few years is lifetime management of the patient and valve management. You introduced RESILIA, which has the anti-calcification material that allows for longer durability. Where does Edwards stand in the evolution of that discussion? And how does SAPIEN X4 fit into that?
Yes. So let me start with RESILIA. This is super important. Like when I said in my opening presentation, 65 years of uninterrupted leadership, which is all what we do for a living, structural heart disease, and we started with RESILIA. Before RESILIA, all of our tissue technology were best in class. We started with RESILIA innovation, I want to say, more than 15 years ago, probably 18 years ago, first patient more than 15 years ago, because we care about durability and lifetime management. We apply RESILIA initially to our surgical valves and now to our TAVR valve with Ultra RESILIA. Beyond RESILIA, we are looking also at what's next. And at the end of the day, when you think about the way we are thinking about our TAVR platform is as follows. We have a differentiated SAPIEN platform. We want to maintain this technology gap.
X4 is an example. We have also a platform beyond X4, bringing more evidence also, so this is the way we are thinking about this long-term commitment to patients and to growing this segment for us.
I think it's fair to say TAVR was the key growth driver for Edwards. It's still a growth driver. But the future is going to be more in TMTT, where the untapped potential really sets it. And let's start with tricuspid and EVOQUE. This you launched last year. You're the only approved tricuspid replacement device on the market. Maybe speak to the performance you've seen of that so far since launch and what the ultimate opportunity is for EVOQUE?
We are super excited about EVOQUE. It took us again probably eight years of development. This is Gen 1. The kind of outcome we are having for patients with Gen 1 is amazing. There is a complete excitement in the marketplace. Everybody wants it. It is a reproducible, easy to use technology with great outcome. But again, replacement is not necessarily competing with TEER. The beauty of our portfolio is physicians can treat more patients. The TEER eligible patient and the replacement eligible patient are not the same but super excited about that, but what you can expect is seeing a Gen 2 EVOQUE, a Gen 3 EVOQUE. We already have this in the pipeline. The next gen of clinical science with EVOQUE also is coming to make sure we help physicians make the right decision for their patients.
One of the things that we've learned, Robbie, since the EVOQUE platform was launched was how consistent procedure times are. And so one of the most complicated things about managing capacity at hospitals is predicting how much time is going to be needed on the schedule for the cath labs. And what we've seen with EVOQUE is very consistent, approximate one-hour procedure times over and over again. And that certainty, I think, is increasing the confidence of physicians about the role that this therapy can play for patients who are suffering from tricuspid disease.
Bernard, you mentioned very specifically Gen 1, Gen 2, Gen 3. If I think about 10 years ago, the SAPIEN valve compared to SAPIEN 3 Ultra RESILIA today, it's sort of almost criminal to think about that was going in the body at the time. Is that sort of the pathway of evolution we should expect with EVOQUE and that kind of progression of size and performance over time?
I would say yes and no. Yes, because we are going to continue to innovate, and no, because we already applied the learning from TAVR to EVOQUE. So if you look at the Gen 1 EVOQUE today, it's way more developed than what TAVR Gen 1 was. The delivery system of EVOQUE today is at par with our TAVR SAPIEN delivery system. Our valve technology, tissue technology is the same. So we applied a lot of learning, but yeah, we are going same kind of journey, more innovation coming, easier to use, being able to be applicable to more patients, reproducible. Today, a TAVR procedure is done in half an hour. An EVOQUE procedure is done in an hour. Can we go down to less? All of these kind of things. Yes.
You made the interesting comment that TEER and EVOQUE don't overlap. Repair and replacement are separate populations. I know that's been an evolving discussion. Do you think the clinical community is at a point now where they have a clear definition of what device is applicable to which population?
Not yet, but we are making PROGRESS. I see PROGRESS. I see a varied level of conversation at medical convention. People are starting to have some definition about what is more TEER eligible, what is more replacement eligible. Obviously, all of that is guided upon the technology available. With TEER improving, with replacement improving, this patient segmentation is going to evolve. But yes, it is starting. It is not yet fully mature, but it is evolving.
That's, I imagine, tricuspid comments. Is it also the same in mitral, where not far away in the heart, but very different procedure, very different procedure times and access? So maybe talk about the efforts Edwards is undergoing in mitral replacement. You already have PASCAL approved for mitral repair. But talk about mitral replacement, something we're going to start to see more from in 2025.
Exactly. So a little bit of lagging on the mitral side because only TEER, so repair technology, are available. But M3, we expect that to be approved in Europe mid-2025 and following by the US in 2026. So physicians are going here also to learn, to segment the patients. So we are going to see the learning. So it is tough right now to predict how the mitral space is going to evolve with two kinds of modalities. I expect, we expect that it's going to evolve the same way it is evolving on the tricuspid side. But a little bit too early because it is not yet available.
Maybe if I could pivot a little bit, Scott, M&A is not something we've really talked about in past years here. Yet you've had multiple acquisitions, and you sold the Critical Care business. So maybe now that most of those portfolio moves are completed, how are you thinking about just the portfolio at Edwards and M&A in general moving forward from this point?
We like our portfolio a lot. We think we've got all the pieces in place to really advance this collection of therapies for patients suffering from aortic, mitral, and tricuspid diseases in particular. So we like where we are right now. But we've also always been an acquisitive company. We're acquisitive specifically in the areas that we know best. We're acquisitive in areas that fit squarely into structural heart, which is where we're focused. And so we've done dozens of acquisitions or investments over the last five years, and we'll continue to make investments. These are not large bet the ranch kind of transformational acquisitions. These are things that are complementary to the internal research and development projects that we have underway inside the company. Now, Critical Car e was different. I mean, that was a significant transaction for us.
And it was very strategic because as we looked at our future and our focus on structural heart, we decided that Critical Care would be better operated and better positioned inside of another company. So I'd say that was a one-off and not something that we're planning to repeat.
And if you think about the strategy behind it, again, I talk about it. So TAVR was the main growth driver. And today, we have three: TAVR, Mitral, and Tricuspid. With some of the investment we made internally and externally, we have two emerging opportunities: TAVR AR and structural heart failure with plenty of opportunity. So that's the strategy. That's the vision to have us being this global leader in structural heart disease with three, four, five growth drivers with significant opportunity.
Congratulations on the NCD for remote heart failure monitoring. Maybe just talk to how heart failure monitoring fits into this. I know heart failure is part of mitral and tricuspid valve disease. So there's a near adjacency. But has that fit into the strategy? And is there more room to go in heart failure overall?
In a short answer, yes. We see heart failure as a big opportunity. There are not many technologies available. When we look at this space, it was a long time ago. Seven years ago, we made some early investment, even an option deal. And then we exercised the option in July 2024. We did it also in a very different manner where we did it. The trigger point was great clinical outcome from the technology, Cordella from Endotronix, FDA approval. And we knew also that the company was working with CMS to get an NCD. So here, it is more short term in terms of having revenue, even though we are going to spend the time to build the right foundation so we can unlock a large market potential here. So that's our step one into heart failure. We are looking at overall modalities here.
It is way too early to talk about it. Like Scott said, it is very much aligned with our strategic fit. We look at many technologies that can help patients. But too early to talk about it.
Maybe if I turn to financials, something I didn't hear you talk about the analyst day was just as we lay out 2025. And I'm looking at the quarters. And my model, I have a very difficult comp in first quarter. I think you have an extra selling day. And then maybe a little easier comp in fourth quarter with some of the hurricane impact if we end up seeing that in fourth quarter. How should we think about the cadence of growth? I know you have the 8%-10% overall for the company. But is there any plus or minuses in different quarters of the year?
You're right. Well, there are a couple of things. One is relatively small, and that's in Q1. There's one less selling day in Q1 2025 than there was in 2024. So that's a little bit of a headwind. But I think more notably is in TAVR, where we're expecting to get approval for the asymptomatic patient population. That will be a meaningful change during the course of 2025. And so we're expecting that we may see higher growth rates after the approval than before the approval.
Got it. Understood. Maybe if I walk down the P&L, you talked about all the investments you're making in clinical trials that I think you're by far the most heavily invested in, I guess, innovation of evidence or discovery of evidence in this space. How should we think about you talked about leverage down the P&L, double-digit EPS growth in a position moving forward in 2026. How should we think about some of the leverage down the P&L? And is that scaling back investment in evidence generation, or is it coming from somewhere else in the P&L?
We're being really strategic and very disciplined in where we invest. And so we're going to continue to be investors in research and development. But we're also going to do it in areas where we think we can really generate breakthrough technologies that we can commercialize. Over the years following 2026, we're expecting that we can grow our operating margins by 50-100 basis points per year on average. And you'll see that as a contributor to that double-digit bottom line EPS growth that we talked about. But overall, we feel like we've got the right kind of investment structure. We're being disciplined in operating expenses. This year in 2025, we're expecting OpEx to grow mid-single digit rates relative to top line growing faster than that. And so that's, I think, a good indicator of how we're planning to run the P&L going forward.
Is that a sustainable type of mid-single versus high single? Is that kind of leverage possible on a go-forward basis, or is it a one-time in nature?
For sure, 2025, that's the profile. In 2026 and beyond, part of this is lumpy. So what we do is make strategic-based decisions. And if we feel like there's an opportunity to double down on investment in order to accelerate bringing a technology to market or advancing a technology to faster growth, we're going to do that. That's first priority is driving organic top line growth. But at the same time, we're also going to continue to be disciplined in where we're spending money and where we're making investments.
And I talk about that a little bit, Robbie. Clearly, what you can expect beyond 2025 is top line, on average, 10% EPS being leveraged. So I think it is important. But growing the top line is our number one priority. But we know that the EPS also is super important. And we are committed to deliver on EPS leverage.
Great. Well, we're out of time. Thanks for a great discussion. Thanks, everyone, for attending.
Thank you.